On Friday, House leadership confirmed that the Secure and Fair Enforcement Banking Act of 2019 (the “SAFE Banking Act”) is scheduled to receive a floor vote this week. This announcement follows a strenuous legislative process to normalize banking for the cannabis industry.
If enacted, the SAFE Banking Act would protect depository institutions that provide financial services to cannabis-related businesses from the threat of federal penalties. The SAFE Banking Act would prohibit federal banking regulators from (i) terminating or limiting deposit insurance, (ii) penalizing or discouraging depository institutions from providing services to the cannabis industry, and (iii) encouraging depository institutions not to offer financial services to cannabis industry participants. Additionally, the SAFE Banking Act clarifies that all proceeds from transactions with legitimate cannabis-related businesses would not be considered “proceeds” from “unlawful activity” under 18 U.S. Code § 1956 – 57 (Anti-Money Laundering Statutes). Finally, the SAFE Banking Act protects depository institutions and Federal Reserve Banks from federal liability for providing financial services or investing any income derived from these services.
The SAFE Banking Act must receive 2/3 of the chamber (or 290 members) support to pass. As of September 20, 2019, the SAFE Banking Act has 206 co-sponsors.
The SAFE Banking Act is backed by the American Bankers Association (ABA), Credit Union National Association (CUNA), Independent Community Bankers of America (ICBA), National Bankers Association (NBA), 50 state banking associations, the National Association of State Treasurers, the top financial regulators of 25 states, a majority of state attorneys general and bipartisan governors of at least 20 states.